On the same day that Taylor Wimpey announced a complete withdrawal from the London development market, one of the Capital’s only major house builders left received another politically driven set back.
The brownfield emergency became even more acute as Southwark Planning Committee refused Berkeley’s Bermondsey Place Phase 2 and 3 on Tuesday evening.
Six votes to nil, against the officer recommendation. Officers recommended it be granted. The same morning, the Housing Minister wrote to the Planning Inspectorate reminding it that the new NPPF creates a “universal tilt” towards approving development. PropViews asks: what does a planning refusal actually cost?
What Was Refused
Bermondsey Place — Malt Street, SE1 5AY, application reference 25/AP/2987 — is Phase 2 and 3 of a development that already has planning permission. Phase 1, 285 homes at 40% affordable housing, is under construction. Berkeley obtained the original consent in 2020 for up to 1,453 homes at 40% affordable across all phases.
The application refused last night sought permission for a further 1,060 homes across eight buildings ranging from six to 36 storeys, on the Old Kent Road Opportunity Area. Of those 1,060 homes, 81 were to be affordable: 56 social rent, 26 intermediate. That is 12% of the total by hab rooms.
The gap between 2020’s 40% and 2026’s 12% is not negligence or bad faith. It is simply arithmetic. The viability assessment identified zero but 12% was offered, The economy between those two years produced the worst construction cost inflation in a generation, a sustained period of elevated interest rates, and a exit environment that has rendered large swathes of London’s for-sale pipeline unviable. Berkeley did not change. The numbers did.
The Minister’s Letter — Published the Same Morning
On the morning of 6 October 2026, Matthew Pennycook wrote to the Chief Executive of the Planning Inspectorate setting out how the new National Planning Policy Framework — published in August — should be applied in decision-making.
The Minister described the new NPPF as creating a “universal tilt” in favour of granting planning permission for qualifying proposals. Development should be approved unless the benefits of doing so would be substantially outweighed by adverse effects when assessed against Framework policies. This applies to development within settlements as a default.
The letter directed the Planning Inspectorate — and by implication every decision-maker in the system — to afford “substantial weight” to two categories of benefit: housing that meets evidenced community needs, and the economic benefits of commercial development. Pennycook was explicit that the planning system should function as an “enabler of appropriate development” and that consistent, certain outcomes were the objective.
The timing is not incidental. It illustrates the structural problem at the heart of the English planning system: national policy can set a direction, but local committees retain the power to ignore it — at least until an Inspector overturns them on appeal, at considerable public cost to both sides.
What the Officers Found
The Southwark planning officers subjected Berkeley’s Financial Viability Assessment to independent scrutiny before recommending grant. Their conclusion, at paragraph 526 of the committee report, is unambiguous:
“The scheme has been thoroughly interrogated in terms of its development viability by the Council’s officers and independent consultants, and the 12% affordable housing is considered to be the maximum the scheme could deliver at this time.”
Across all three phases — Phase 1 at 40% already under construction, Phases 2 and 3 at 12% — the aggregate affordable housing across the whole Malt Street development would be a minimum of 17.9%. Not 40%.
A three-stage viability review mechanism was built into the Section 106 obligations. If land values or sales values improve during construction, there is a contractual mechanism to increase affordable housing delivery accordingly. The GLA’s Stage 1 report, signed in January 2026, supported the scheme in principle.
Inside the Committee Room
The vote was 6-0. But before it was cast, the committee’s preparation for the meeting deserves examination.
One of the first questions from members was what would happen to people living on the site. The site is a cleared former Travis Perkins builders’ merchant. There is nobody living on it. Members had not done their homework.
Another member suggested that if you stripped out £33 million in CIL and finance costs, the scheme could afford to pay for the affordable housing — that Berkeley effectively had free money. This is not how development finance works. Finance costs are real costs, borne by the developer throughout the construction period, and they are precisely the kind of cost that independent viability assessors examine in detail before reaching a conclusion. The council’s own independent consultant had already done this analysis. The committee declined to engage with it.
A councillor who had recused himself from the vote — Richard Livingstone — was nonetheless afforded twenty minutes to make his case before it was cast. The case, by all accounts, was not about the jobs, the CIL, the three-stage review mechanism, or the 285 affordable homes already being built on Phase 1. It was about the 35%.
This is the committee culture that the Minister’s letter was implicitly addressing. The planning balance — the full accounting of benefits and harms that the system requires — was not run. The number 35% was run instead. Members obsessed with the perceived harm of 35% to 12% rather than the significant benefit of 12% rather than zero.
What the Committee Did
The committee refused. The 35% Campaign, which objected to the application, inadvertently revealed the logic of this position in their own submission. They argued, at paragraph 475 of the committee report, that “the scheme would still be unviable despite lower affordable housing. It therefore cannot be reasonable to approve such a change.”
Read that again. If the 35% Campaign is correct — if the scheme is unviable regardless of the affordable housing level — then refusal does not produce more affordable homes. It produces zero homes. The logic of their own objection is that Bermondsey Place will not be built, and that this is a satisfactory outcome.
Ideology ignores collateral damage
Let’s run through the butcher’s bill:
Legal fees
Berkeley could appeal although it is likely the GLA will take over the decision making process. A major planning inquiry — a 1,060-home scheme generating £26.9m in Southwark CIL and £6.7m in Mayoral CIL — costs both sides. A reasonable estimate for a scheme of this complexity is £500,000 in legal, consultant, and counsel fees for the applicant alone. The local planning authority will spend a smaller but not insignificant sum of public money defending a refusal that its own officers said should be granted. The Inspector, applying the new NPPF’s “universal tilt”, is likely to disagree with the committee.
Officer hours
The committee report for 25/AP/2987 runs to over 200 pages — months of officer time covering viability, heritage, transport, ecology, energy, socio-economic impact, and consultation responses. That time must would have to be duplicated for an appeal. The same officers who recommended grant could spend a further round of months re-preparing the case, this time to defend a refusal they did not recommend.
Households in temporary accommodation
Southwark has over 5,700 households in temporary accommodation. Every month that 1,060 homes are delayed is a month those households remain in temporary accommodation at public expense. The LGA estimates temporary accommodation costs local authorities around £18,000 per household per year — costs borne by the same council that just voted 6-0 to refuse the homes that would relieve the pressure.
Jobs and economic activity foregone
The committee report identified 41 full-time equivalent permanent jobs associated with the completed development, generating £76,650 per year in employee expenditure and an estimated £9.8 million per year in household expenditure to the local economy. The member who queried the finance costs said nothing about these numbers. Nobody did.
The 81 affordable homes
81 affordable homes — 56 social rent, 26 intermediate — were on the table last night. They are now off it. The households who would have occupied those 81 homes will remain on Southwark’s waiting list.
A Pattern, Not an Incident
Bermondsey Place does not stand alone. PropViews has documented the pattern:
In each case, the committee’s stated purpose was to protect affordable housing. In each case, the outcome is nothing gets builts
What the Government Should Do
The Minister’s letter to PINS is the right statement of policy intent. But a letter to the Planning Inspectorate only changes outcomes at appeal — it does not change what happens in a committee room. The government cannot hit 1.5 million homes by 2029 if major schemes fall at the final hurdle of a committee vote, only to be overturned on appeal 18 months later at significant public cost.
The national scheme of delegation — which Pennycook also consulted on in March 2026 — is the mechanism that could change this. If major schemes with officer recommendations to grant are removed from committee discretion, or subjected to a gateway test before committee can override officers, the Bermondsey Place scenario becomes less likely. The consultation closed in April. The regulations were intended for Autumn 2026.
Before a committee votes to refuse against an officer recommendation, it should be required to publish the full accounting: appeal probability, estimated legal costs, households delayed, jobs foregone. Make committees own the scorecard.
What Happens Now
Berkeley will consider its options. An appeal maybe, a Mayoral call in likely. The Old Kent Road Opportunity Area — one of the largest brownfield regeneration zones in inner London — will continue to underdeliver while the legal process runs.
But the damage is done and every month the spotlight on the housing crisis shines brighter on the problem. That problem is the political class that have created a situation where housing is underfunded and developers take the heat because no one dares to fix a system which would either mean disaggregating subsidised housing from private supply or actually funding it properly. Instead a system, laden in trade offs that are ignored, is captured by ideologues and vested interests. We all get poorer the longer this is ignored.
And finally, can anyone honestly still think Southwark deserves a Bakerloo Line extension if it cannot approve major applications like this?
